Gross international reserves slip in Feb.

DOLLAR RESERVES slipped anew in February due to lower gold valuations, and as the central bank used the funds to intervene during the daily foreign exchange trading.

Gross international reserves (GIR) totalled $80.618 billion last month, down for the second straight month coming from $81.224 billion in January, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

The figure also declined from $81.436 billion worth of reserves in February 2017, and is the lowest since November’s $80.31 billion level.

In a statement, the central bank said the decline in reserves came were mainly due to their foreign exchange operations, as well as payments made by the national government for its foreign debts.

The central bank sometimes uses the reserve fund to influence daily peso-dollar trading by buying or selling more units in line with the BSP’s “tactical intervention,” in order to temper sharp swings in the exchange rate.

The BSP’s foreign exchange holdings jumped to $6.203 billion from $5.752 billion a month prior. Central bank officials previously said that a weaker peso actually meant trading gains for the central bank, as the regulator remains long on dollars.

The peso averaged P51.7856 versus the greenback in February as it touched 12-year-lows, coming from a P50.5087 average in January.

Lower gold valuations in the international market also led to the GIR decline, with the value of the BSP’s gold holdings down to $8.308 billion from $8.501 billion in January.

Income from the central bank’s foreign investments likewise dropped to $64.442 billion, coming from $65.304 billion in January and the $68.203 billion a year ago, data showed.

The BSP said higher foreign currency deposits helped offset declines in several reserve components. In particular, $1 billion new money raised from the Philippines’ global bond offer in January boosted net funding.

Reserves kept with the International Monetary Fund (IMF) inched lower to $428.6 million from $431.5 million. On the other hand, special drawing rights — or the amount which the Philippines can tap under the IMF’s reserve currency basket — steadied at $1.236 billion.

February’s GIR stash compares to the $80-billion level expected by the BSP by end-2018, which would be lower than the $81.57 billion posted in December 2017.

Despite the decline, the GIR can still cover up to 8.2 months’ worth of import payments, well above the three-month global standard. It can also pay up to 5.9 times the country’s short-term external debt on original terms, and up to 4.2 times when computed on residual maturity.

International reserves are composed of gold, the BSP’s assets expressed in foreign currencies, country quotas with the IMF, and foreign currency deposits held by government and state-run firms. — Melissa Luz T. Lopez